Brazil Killed Credit Cards in 4 Years. Wall Street Is Panicking.

Source: Dev.to

A street musician in São Paulo holds up a QR code. Tourists scan it with their phones. Money arrives instantly. No app download. No fees. No credit‑card companies taking their cut. This is Pix and it’s rewriting the rules of global finance.

The Revolution Nobody Saw Coming

In November 2020, while the world was locked down battling COVID‑19, Brazil’s Central Bank quietly launched something extraordinary. They called it Pix, a four‑year‑old payment system that today processes more transactions than Visa and Mastercard combined in Latin America’s largest economy.

• 175 million users
• Over 64 billion transactions in 2024 alone
• Nearly $3.8 trillion moved through the system last year
• 93 % of Brazilian adults now use Pix, with 62 % calling it their most frequent payment method

Pix is completely free for individuals, operates 24/7 without interruption, and settles instantly—no waiting, no fees, no intermediaries taking a slice. Visa, Mastercard, and the global credit‑card industry are watching in horror as their business model collapses in real time.

Meet Patrícia: The Face of Brazil’s Payment Revolution

Patrícia Souza walks through São Paulo’s bustling streets with something her parents never imagined possible: no wallet, no cash, no cards—just her phone.

“It’s more practical,” she explains, buying grilled meat from a street vendor by scanning a QR code. The money transfers instantly, the vendor’s phone chimes, and it’s done. “I don’t need to carry a card or cash. I can pay anywhere with my phone.”

At a nearby department store, she gets 10 % off her purchase for using Pix. The store avoids credit‑card processing fees that can eat up to 2.2 % of each sale, passing the savings directly to customers.

Kelvin Quadros Winck, who works at a cellphone‑accessory store, hasn’t touched paper money in over a year. “Before, it was money. Now, it’s Pix,” he says. “All ages are using it. Everyone’s adapted.”

This isn’t a tech‑enthusiast bubble; it’s mass adoption at a scale that makes Silicon Valley’s wildest dreams look modest.

The Numbers That Broke Finance

• 2020: Pix accounted for 1 % of Brazil’s payments; debit cards 26 %, credit cards 36 %.
• Late 2024: Pix commands 47 % of all financial transactions; debit cards have collapsed to 13 %; credit cards remain at 36 % but are rapidly losing market share.

In 2023, Pix transactions surged 74 % to nearly 42 billion payments, surpassing combined credit and debit card transactions by roughly 23 %. By 2024, Pix processed approximately 64 billion transactions—a year‑over‑year increase of 53 %.

Cash use has plummeted from 76.6 % in 2019 to just 22 % today. Analysts project Pix will account for 44 % of Brazil’s entire online payment market by the end of 2025, while credit cards drop to 41 %.

Goldman Sachs warned that Pix’s growth “can limit the use of credit cards,” noting that major payment processors derive significant revenue from card transactions: Stone (49 %), PagBank (34 %), and Cielo (9 %).

How Did This Happen?

Brazil’s payment system was broken: banks charged exorbitant fees, wire transfers took days, credit‑card companies extracted massive cuts, and cash remained king because digital alternatives were expensive, slow, or inaccessible.

In May 2018, during Michel Temer’s administration, Central Bank President Ilan Goldfajn created a working group called “Pagamentos Instantâneos” (Instant Payments) to design a system that served Brazilians, not banks. The project continued under Roberto Campos Neto and launched as Pix in November 2020.

Two Revolutionary Features

1. Government‑Run Infrastructure – The Central Bank of Brazil operates the entire system; no private company profits from Pix transactions.
2. Mandatory Participation – All major financial institutions were required to join from day one, eliminating the network‑effect problem that kills most payment innovations.

Result: instant ubiquity. If you have a bank account in Brazil, you automatically have Pix access—no separate app, no sign‑up process, just open your banking app and start sending money.

How Pix Actually Works (It’s Brilliant)

Step 1: Create Your Pix Key
Register a “Pix key” (phone number, email, tax ID, or random code) that links to your bank account. Individuals can create up to five keys; companies up to twenty. Traditional bank details also work.

Step 2: Send Money
Open your banking app, select Pix, scan a QR code or enter the recipient’s Pix key, confirm the amount, authenticate (biometrics or password), and hit send.

Step 3: Money Arrives Instantly
The recipient’s phone chimes; the money is there immediately—24/7, including weekends, holidays, and midnight.

For individuals, the service costs nothing. For businesses, the Central Bank caps fees at 0.33 % per transaction—a fraction of the 1.13 % for debit cards and 2.34 % for credit cards. Pix costs retailers an average of 0.22 % (Bank of International Settlements).

Example: A retailer processing $100,000 monthly saves roughly $2,000 by accepting Pix instead of credit cards—$24,000 annually that can be reinvested, passed to customers as discounts, or kept as profit.

The Human Stories Behind The Revolution

Alvaro Lima, Biomedical Researcher

Alvaro Lima, 31, lives in São Paulo and works in biomedical research. Before Pix, he’d promise to pay friends back “tomorrow” and then forget. Bank transfers were clunky; cash was inconvenient. Now he uses Nubank’s Pix feature inside WhatsApp—someone mentions he owes them money, he sends it immediately without leaving the chat. “It’s instant,” he says. “No more forgotten payments.”

The Street Musician

A musician sits at Ipanema Beach in Rio de Janeiro with a sign displaying a QR code. Tourists scan the code and tip via Pix. The musician’s phone chimes—money received instantly. This is financial inclusion at street level, with no bank branch, credit check, or minimum balance required.

Mauricio Soares, The Reality Check

Not everyone wins in the Pix revolution. Mauricio Soares sleeps on the streets of Florianópolis. He approaches people for money, but Brazilians now carry less cash, reducing his traditional begging income. (The story continues beyond this excerpt.)